However on Tuesday, in closing statements for Mr. Balwani’s trial, prosecutors tied him on to Ms. Holmes and the yearslong fraud at Theranos. Jeffrey Schenk, an assistant U.S. lawyer and a lead prosecutor on the case, displayed a textual content message that Mr. Balwani despatched Ms. Holmes in 2015 that was used as proof within the trial.
“I’m answerable for every part at Theranos,” Mr. Balwani wrote. “All have been my selections too.”
The textual content message was an request for forgiveness, Mr. Schenk mentioned, including, “He’s acknowledging his function within the fraud.”
The presentation capped greater than three months of testimony in Mr. Balwani’s trial, which largely mirrored that of Ms. Holmes’s final fall. Ms. Holmes and Mr. Balwani, 57, had been charged in 2018 with exaggerating the talents of Theranos’s blood-testing machines and enterprise efficiency when, actually, the merchandise didn’t work and its enterprise was struggling. The pair pleaded not responsible. Ms. Holmes was convicted on 4 of 11 fees.
The trial for Mr. Balwani, who is named Sunny, lacked the fanfare of Ms. Holmes’s high-profile case. It nonetheless serves as a coda to a waning era of start-up growth that always relied on hype and hyperbole. Ms. Holmes and Mr. Balwani are among the many only a few tech executives who’ve ever been prosecuted for fraud.
Simply as Ms. Holmes tried blaming the deceptions at Theranos on others, Mr. Balwani has pointed the finger again at her. All through the trial, his legal professionals argued that a lot of Theranos’s blood exams had labored. And so they mentioned Ms. Holmes, not Mr. Balwani, had managed Theranos. They had been set to start their closing argument in a while Tuesday.
Ms. Holmes, now 38, met Mr. Balwani when she was 18. They started courting years later, after Ms. Holmes had based Theranos. In 2009, Mr. Balwani invested in Theranos and have become its chief working officer, ultimately taking cost of its lab. The pair saved their relationship a secret and lived collectively in a sprawling house they co-owned in Atherton, Calif.
In 2016, after Theranos got here beneath fireplace for mendacity about its blood testing skills, Mr. Balwani left the corporate and cut up with Ms. Holmes. The pair had been charged with fraud collectively, however Ms. Holmes argued in filings to sever the instances and accused Mr. Balwani of emotional and sexual abuse. Her trial included dramatic testimony recounting the accusations. That topic was excluded from Mr. Balwani’s trial.
To convict Mr. Balwani, prosecutors should persuade jurors that he deliberately lied to traders and sufferers about Theranos’s blood exams and enterprise dealings.
Prosecutors tried placing the blame on Mr. Balwani for monetary projections that Theranos confirmed to traders and the situation of its labs. New witnesses included traders and executives who dealt immediately with Mr. Balwani, reasonably than Ms. Holmes.
One projection, offered to traders in October 2014, confirmed Theranos would herald $140 million that yr. In actuality, income was restricted. The following yr, Mr. Balwani projected almost $1 billion in income in pitches to traders. Theranos’s inner projections had been a lot decrease, proof confirmed, and the fact was nearer to zero.
A brand new witness, Patrick Mendenhall, who dealt immediately with Mr. Balwani whereas investing in Theranos, outlined the guarantees made that turned out to be deceptive or false.
Brian Grossman, an investor on the hedge fund PFM Well being Sciences, who was additionally a witness in Ms. Holmes’s trial, testified that Mr. Balwani had offered his crew with monetary projections that far overstated Theranos’s projected income.
“When Mr. Balwani communicates with an investor, it’s for a goal, and the aim is to deceive them to get cash,” Mr. Schenk mentioned.
Prosecutors additionally emphasised Mr. Balwani’s function in operating Theranos’s lab, which the manager had known as a “catastrophe zone” in a 2014 textual content message used as proof. Mr. Balwani would additionally “take away dissent” by intimidating or pushing out workers who expressed concern about Theranos exams, like Dr. Adam Rosendorff, a former lab director who testified in each trials, Mr. Schenk mentioned
Notably absent from the witness stand had been James Mattis, a former protection secretary and Theranos board member, and Ms. Holmes, who had each testified in Ms. Holmes’s trial. Mr. Balwani didn’t testify in his protection.
If he’s convicted, Mr. Balwani and Ms. Holmes will likely be sentenced collectively in September.